The reproposed amendments to Rule 4210 attempt to address
commenters' concerns that the original proposed rule would
impact business activity in the TBA market.
On September 24, the Financial Industry Regulatory Authority
(FINRA) proposed a revised rule (the "Reproposal") that
would implement, among other things, margin collection requirements
for (1) To Be Announced (TBA) transactions, including adjustable
rate mortgage (ARM) transactions;1 (2) Specified Pool
Transactions;2 and (3) transactions in Collateralized
Mortgage Obligations (CMOs)3 with forward settlement
dates that exceed three business days.4
Consistent with the original proposed rule issued in January
2014 (the "Original Proposal"),5 FINRA
reiterated that the proposed amendments are based on best practices
adopted by the Treasury Market Practices Group (TMPG) of the
Federal Reserve Bank of New York (FRBNY) and are designed to reduce
counterparty credit risk in the TBA market.6
